The Consumer Products Division faced a daunting set of problems shortly after divestiture in 1986. The Division was losing $200 million/year. On the advice of consultants they had downsized from 40,000 employees to 16,000 and closed dozens of locations in order to cut costs. Morale was at an all time low. The corporate culture, coming out of a monopoly, struggled with developing a competitive edge. The Division was given 18 months to stop losses and become competitive or they would be closed.
We provided a custom-tailored program to rebuild the business. Over three years, we trained 6,000 managers, in groups of 60-80, at sites all over the country. We installed innovative management practices and created winning teams so that the Division could successfully compete. The Division’s culture changed as people developed the shared values of competence, ambition, productivity, accountability, and support. Our work with the Division came to be called “Project Miracles.”
The Consumer Products Division experienced a remarkable turnaround. Over the next four years, the Division generated $3 billion in profits. Managers’ ratings of job satisfaction, morale, and trust skyrocketed. In a company-wide culture survey, Project Miracles participants were singled out from the rest of AT&T because they were skewing results for the entire company. Consumer Products, once in danger of closing, now was an example of a company experiencing peak performance.